debate Cartelisation by leading Domain drop catching Companies - will ICANN ever wake up?

[krishmk]

As you all know the market for drop catching is clearly driven by handful of leading companies giving no chance for a normal domainer to register domains of his choice. Their business clearly injures end domain users by spiking prices and restricting supply of the expired domains to the general public.

Ain't this against the Anti-cartel law or the Anti-Competition law?

Will FTC or ICANN ever try to regulate this unethical/unlawful business practice?
Will there be any change in the domain drop timings and the number of queries one Entity can make to the Registry giving fair opportunity to every one?

 

[tonyk2000]

Monopolization is a federal crime under Section 2 of the Sherman Antitrust Act of 1890.

This logic may not be applicable here. Any domain can only be registered just once. No court or other entity can prescribe super-good-domain .com to be registered to 2 or more different registrants, so... If there is high demand vs technically limited supply - how can this be solved in legal way?

 

[krishmk]

This logic may not be applicable here. Any domain can only be registered just once. No court or other entity can prescribe super-good-domain .com to be registered to 2 or more different registrants, so... If there is high demand vs technically limited supply - how can this be solved in legal way?

Agreed a domain name can be registered only once - giving a fair opportunity for anyone to register - on first come first serve basis (with no trademark conflicts etc.). The problem is with the drop catching process. These companies create cartelisation by buying ICANN accredited Registrars and then send massive requests to the Registry during the drop time - thereby create anti-competitive conduct such as the cartels which is illegal in the US, EU and several other countries.

 

[tonyk2000]

The problem is with the drop catching process. These companies create shell accounts by buying ICANN accredited Registrars and then send massive requests to the Registry during the drop time - thereby create anti-competitive conduct such as the cartels which is illegal in the US, EU and several other countries.

Many years ago, there was no dropcatching process. Also, only "regular" registrars participated. As the result, the registry was hammered with 24/7/365 "add domain" requests. This started to affect daily operations of the registry and all registrars. WHICH IS WHY a decision was made to formalize drop game.
Eliminating it would mean going back in time, to something that was proven not to work.

 

[Way3]

Right but there is a big difference between savoring a scrumptious whole cake and leaving the left over crumbs.
Why should the powerful entities be given that unfair privilege.

I'm with you on the general thought, but unfair privilege is pretty much the name of just about any game in the world

 

[Josytal]

Classical case of pot calling the kettle black. If you can't beat them, join them.

 

[krishmk]

Classical case of pot calling the kettle black. If you can't beat them, join them.

Certainly not, please read my posts from the beginning. I have put forth my points on how these Companies violate the Anti trust or Competition law. Unfortunate that people like you are so innocent that you dont even understand that your right for a fair and equal opportunity is being abused by large Corporations.

I do not have any intention to compete with those Companies as my line of business is different and not of my interests.

I am raising my voice against the anti-competitive business practices, anti-cartelization and abuse of Market dominance; not for my personal gain - but for each and every one of us.

Like some of the other members stated there was a paradigm shift from "Abuse of Registrars" to "Abuse by Drop-catching Companies". I am hopeful the paradigm will one day shift from this abuse to a fair competitive market.

 

[tonyk2000]

Abuse by Drop-catching Companies

So far, the only proven case was a snapnames halvalrez saga:

https://domainnamewire.com/2010/02/16/halvarez-caused-2m-loss-to-snapnames-customers/

Other cases will no doubts appear. In a dark area of open expired or pre-release auctions (/me thinks). For there is nothing hidden that will not be disclosed, and nothing concealed that will not be known or brought out into the open (New Testament, Luke 8:17). But, it has nothing to do with dropcatching model in general, or the related rules establised by registries or icann...

 

[Josytal]

Certainly not, please read my posts from the beginning. I have put forth my points on how these Companies violate the Anti trust or Competition law. Unfortunate that people like you are so innocent that you dont even understand that your right for a fair and equal opportunity is being abused by large Corporations.

I do not have any intention to compete with those Companies as my line of business is different and not of my interests.

I am raising my voice against the anti-competitive business practices, anti-cartelization and abuse of Market dominance; not for my personal gain - but for each and every one of us.

Like some of the other members stated there was a paradigm shift from "Abuse of Registrars" to "Abuse by Drop-catching Companies". I am hopeful the paradigm will one day shift from this abuse to a fair competitive market.

The problem is that from legal point of view there is nothing like bad, good or superior domain. Further, there is no barrier to registering as many domains as you want. In fact the "permutation " is infinite. For same reason domaining still exists and to some extent drop-catching is a variety of domaining. So let's ban everything altogether.

 

[Samer]

For same reason domaining still exists and to some extent drop-catching is a variety of domaining. So let's ban everything altogether.

Easy there, slippery slope.

I propose solutions not “banning”

Just cap # Registrar own just for DropCatchin
ICANN is so corrupt; too much to ask; i know..
Plus there are some content with status quo.

Samer

 

[Josytal]

Easy there, slippery slope.

I propose solutions not “banning”

Just cap # Registrar own just for DropCatchin
ICANN is so corrupt; too much to ask; i know..
Plus there are some content with status quo.

Samer

And who will enforce and monitor that cap?

 

[oldtimer]

I am raising my voice against the anti-competitive business practices, anti-cartelization and abuse of Market dominance; not for my personal gain - but for each and every one of us.

The dropcatching companies that use multiple registrars do that because they are competing amongst themselves for catching the best domains and are not necessarily trying to leave the domainers out of the game, so as an individual domainer that might put you in a disadvantage, but as far as the dropcatching companies are concerned they are engaged in fair competition amongst themselves which is where the law is most probably going to look at.

One thing that might be even more important than what the dropcatchers are doing and probably needs to be scrutinized further is the fact that some registrars don't even allow some domains to go through the drop process and just keep them in limbo for many months.

The fact that some registrars are in direct competition with their customers for their domains and don't give them ample time to renew them before they put them on auction (or keep them in limbo as already mentioned) should also be of concerned too.

So it's not just the dropcatching part that might need some changes it's the whole drop process that needs to be made uniform across the Industry.

@krishmk , if you were to make a proposal to ICAAN , what would you consider to be a fair way to go about dealing with all this.

IMO

 

[tonyk2000]

The problem is any and all drop process changes they may implement will not help individual domainer in any aspect. It is so obvious... Similar applies to UDRP revision, for example, It would worsen the situation. So it is better not to touch the things.

 

[krishmk]

The dropcatching companies that use multiple registrars do that because they are competing amongst themselves for catching the best domains and are not necessarily trying to leave the domainers out of the game, so as an individual domainer that might put you in a disadvantage, but as far as the dropcatching companies are concerned they are engaged in fair competition amongst themselves which is where the law is most probably going to look at.

Welcome your thoughts and inputs shared in your post above...

Multiple Registrars competing against each other represents a healthy and competitive Market but when the majority of the Registrars are owned by 1 parent entity - is where the question of monopoly and cartelisation comes into play.

@krishmk , if you were to make a proposal to ICAAN , what would you consider to be a fair way to go about dealing with all this..

a) Limit the number of requests an entity can make to the Registry during the drop time.

b) Implement an algorithm where the Registry accepts requests from rotational Clients/Senders instead of fulfilling the pool of requests originating from the same group of Registrars owned by a single parent Company.

c) Limit the number of domains an entity can register expired domains in proportionate to the average number of expired domains being registered in the last X no. of days (similar to grace period - domain deletions)
Anything that can make the Expired domains market a fair and competitive one.

I am open for suggestions from other members as well.

 

[krishmk]

Out of the 2450 ICANN accredited Registrars, here is the breakdown of who controls the market (based on the support email id)
Over 50% market share is controlled by 1 entity

support@namebrightcom: 1252 - 51.10%
customerservice@networksolutionscom: 479 - 19.55%
tldadmin@logicboxescom: 52 - 2.12%
support@mydomain-inccom: 43
support@namecom: 20
registrar@dotmediacom: 20
service@22cn: 16
and others......

Source:
https://www.icann.org/registrar-reports/accreditation-qualified-list.html

Note: Please note that the data provided here by me is subject to detailed/manual review and may not be 100% accurate.

 

[tonyk2000]

Limit the number of requests an entity can make to the Registry during the drop time.

it is already done

Implement an algorithm where the Registry accepts requests from rotational Clients/Senders instead of fulfilling the pool of requests originating from the same group of Registrars owned by a single parent Company.

Single parent Company? Next day, formal ownership of dropcatching registrars will be changed to spouses, random persons looking to make quick $$$, etc, etc.

Limit the number of domains an entity can register

Same as (2). It would not really affect known bulk registrants as they will adopt. Smaller domainers (who are posting here) will be negatively affected.

 

[oldtimer]

Some registrars (and registries) are amassing huge portfolios for themselves form the expired domains either directly or through their subsidiaries. Now if all domains are allowed to go through the complete drop process and if they do this in a passive way that does not put them in direct competition with their customers then it might be okay, but otherwise it means that ICAAN is being laxed about protecting the registrants from unfair competition by registrars (or registries) which might be an indication of some insider dealings being made at ICANN that are against the interest of the registrants.

Add to that the fact that registrars and registries are selling the info for domain searches made on their website or through the whois lookups which deprives a registrant (like a small business) of being able to register a domain that they might have found to be available, but then they notice that it's gone when they go back to register it in a few days after they have made their final choice from the domains that they had shortlisted.

The registrants' rights need to be protected against unfair practices and insider dealings across the board.

IMO

 

[jmcc]

So far, the only proven case was a snapnames halvalrez saga:

That was only one incident. The reality is that some registrars were actively registering the entire day's deletions for some gTLDs. It was far worse than most people realise. The targeting of one gTLD (.ORG) put a significant strain on the registry backend. Between 2005 and 2008, there were over one billion (1,000,000,000) .COM domain names that were registered and deleted in the Add Grace Period. It was extremely serious abuse of a feature that had been created to help registrars. Basically, consumers were frozen out of the market for expiring domain names. Halvarez was only small fry. The actual numbers are in the Domnomics book in the free section on Amazon. The real problem was the subversion of the registrar system and ICANN's lack of action until Dell took out a major domain taster operation and Google decided not to monetise domain names in AGP.

ICANN introduced a kind of restocking fee for the AGP registrations that added a cost to the transaction. This meant that the registrars could no longer domain tast for free. Some of the registrars then focused on small sets of "good" domain names. The circumvention of the natural domain name life cycle (where a domain name goes through the deletion process) by moving expired domain names to auction partner sites accelerated after the introduction of the ICANN transaction fee and Google demoting PPC-only pages in its search engine index.

The registry constituency is one of the most powerful groups in ICANN. ICANN depends on the registrars and domain name fees for its commercial existence. Most domainers have never even attended an ICANN meeting. There is an At-Large constituency that is meant to represent the ordinary registrants and users but for some in this constituency, domaining is a dirty word. There are other constituencies dealing with Intellectual Property, Civil Society (non-profits and do-gooders), and govermental/national interests. But there's none for domainers. In some respects, domainers are like sheep to be sheared to both ICANN and the registrars.

Regards...jmcc

 

[jmcc]

Out of the 2450 ICANN accredited Registrars, here is the breakdown of who controls the market (based on the support email id)
Over 50% market share is controlled by 1 entity

It isn't. There is a mix of registrar types in that list. The dropcatcher registrars do not sell to the public. Their single purpose is to dropcatch. They also don't hold many domain names as the domain names are typically moved off to auction sites. The number of registrars owned by an entity does not directly equal market share.

Regards...jmcc

 

[tonyk2000]

The reality is that some registrars were actively registering the entire day's deletions for some gTLDs. It was far worse than most people realise.

Yeah, indeed. They were looking for traffic domains. And, after 5 days, deleted the rest. Those domainers who found out exact (or approximate) deletion time used by each particular bulk tester, could handregister some of their deletions immediately . Including domains which originally had a lot of preoreders with regular dropcatchers. No snapnames or pool .com bidding, no halvarez... Just pure regfee.... Was a perfect method to build a portfolio, and, if I am not mistaken, it is was not widely discussed on another forum, thanks goodness (namepros, even if it existed, was too young and had little or no serious activity). This method is no more available. It is unfortunate.

Was it abuse? In most aspects, no. The largest issue was that some testers immediately reregistered their deletions themselves, so they actually used domains for months with paying anything to the registries. Which was one of the reasons why the whole thing was eliminated.

 

[BrandEntrance.com]

While I sympathise with the OP it still is a case of the pot calling the kettle black from an end-user perspective.

 

[jmcc]

Yeah, indeed. They were looking for traffic domains. And, after 5 days, deleted the rest. Those domainers who found out exact (or approximate) deletion time used by each particular bulk tester, could handregister some of their deletions immediately . Including domains which originally had a lot of preoreders with regular dropcatchers. No snapnames or pool .com bidding, no halvarez... Just pure regfee.... Was a perfect method to build a portfolio, and, if I am not mistaken, it is was not widely discussed on another forum, thanks goodness (namepros, even if it existed, was too young and had little or no serious activity). This method is no more available. It is unfortunate.

The Internet was much smaller then and the process did require a lot of coffee.

Was it abuse? In most aspects, no. The only issue was that some testers immediately reregistered their deletions themselves, so they actually used domains for months with paying anything to the registries. Which was one of the reasons why the whole thing was eliminated.

Arguably, it was closer to the natural domain name life cycle. ICANN didn't really seem to want to do anything about domain tasting or drop catching. The At-Large Constituency complained about it and ICANN did some investigation but it would have done nothing about it if the whole thing hadn't blown up in the media with the Dell case against Belgium Domains. What was interesting, looking at the stats and the registrars involved was how the portfolios were being created. After many of the high value domain names had been registered in the first few years, a lot more people seemed to get in on the business and the registration volume sky-rocketed. Google, for all its hypocrisy about "Don't be evil", made a lot of money from the whole thing.

Regards...jmcc

 

[jmcc]

Multiple Registrars competing against each other represents a healthy and competitive Market but when the majority of the Registrars are owned by 1 parent entity - is where the question of monopoly and cartelisation comes into play.

This is one of the metrics that the US Department of Justice uses when examining market concentration:

https://www.justice.gov/atr/herfindahl-hirschman-index

Basically, these owned registrars even when combined as a single entity don't have enough market share to be a problem. They are not targeting all dropping domain names. This means that they are only competing with other registrars for a small number of domain names each day. Now if a set of these registrars were registering over 50% of each day's deleted domain names, it might be a problem but the low numbers keep it off the DoJ's radar when it comes to market concentration and competition. Cartels are something quite different. These dropcatch registrar groups are not colluding with each other. Each group is competing with each other.

Regards...jmcc

 

[krishmk]

While I sympathise with the OP it still is a case of the pot calling the kettle black from an end-user perspective.

Even after reading the entire thread - if that is what your understanding is - so be it

 

[krishmk]

It isn't. There is a mix of registrar types in that list. The dropcatcher registrars do not sell to the public. Their single purpose is to dropcatch. They also don't hold many domain names as the domain names are typically moved off to auction sites. The number of registrars owned by an entity does not directly equal market share.

Regards...jmcc

Regardless of the type of Registrar - a Registrar accredited by the ICAAN is an "ICANN accredited Registrar" and thats why it appears on that 2450 list. If it makes a different they wont show up on the list. Agreed that number of entity doesnt not equate overall market share - but going by the number of approved Registrars and being owned by a single entity is a matter of concern. If we are referring to the overall market share by Sales volume - we all know it would be the behemoth "GoDaddy" - which has created monopoly by merit and by its successful business practices (and I dont have any issues with it).

Basically, these owned registrars even when combined as a single entity don't have enough market share to be a problem. They are not targeting all dropping domain names. This means that they are only competing with other registrars for a small number of domain names each day. Now if a set of these registrars were registering over 50% of each day's deleted domain names, it might be a problem but the low numbers keep it off the DoJ's radar when it comes to market concentration and competition. Cartels are something quite different. These dropcatch registrar groups are not colluding with each other. Each group is competing with each other.

Well I am pretty sure the folks at DoJ are smart enough to recognize (if educated) that this argument refers to the valuable domains that are being snatched and not the remaining 90-95% of worthless domains that drop every single day. Whether the entities compete with each other or not they ultimately serve the sole purpose of auctioning the snatched domains at their parent company. If all those entities would either register the caught domains for their own customers or list on auctions on their own sites - it could be a different game and the question of monopoly will never arise.

@jmcc - I certainly appreciate your efforts and the time you spend on the counter-arguments without mocking me with some irrelevant idioms or personally offending me on any of your posts (unlike some other members here) and with well researched points. I will also go through the metrics of DoJ you had shared.

Its my first day in Office here (been working from home for the past 5 months due to corona episode). I just started this thread with a healthy debate - but its getting really interesting day by day.

 

[tonyk2000]

folks at DoJ are smart enough to recognize (if educated) that this argument refers to the valuable domains

How they are supposed to determine what a valuable domain is? Their actions are based on the law exclusively. Since they are in U.S., U.S. law matters. No part of U.S. law says what a valuable domain is, and why is it different from an "ordinary" domain.